Every resident of Texas that drives a motor vehicle has a responsibility to fully understand what the minimum auto insurance requirements are for drivers in Texas. Every state has different requirements for auto insurance although most states require liability insurance at a minimum for the motorist. Only five states do not require minimum liability insurance, but they do require that a motorist purchase the predetermined state minimum for auto insurance. Texas is among the other 45 states in that their insurance laws require that the motorist have minimum liability insurance.
Understanding the Numbers
Whenever looking at minimum requirements it is important to be able to read the numbers listed for liability requirements. Every listing for liability insurance will have three numbers. The first number stands for the minimum amount of money in thousands that the insurance company will cover for one bodily injury. The second number of the three stands for the amount of money provided for all bodily injuries in an accident. The third number in any liability listing will tell you the amount of money given for property damage.
For example, a 20/40/15 listing would tell you that $20,000 is allocated to one bodily injury, $40,000 for all bodily injuries and $15,000 for property damage. A 25/50/20 listing would stand for $25,000 bodily injury (single), $50,000 bodily injury and $20,000 property damage. Every state’s minimum requirements are different, but they must be met. For example, you couldn’t walk into an insurance office and purchase $2000 worth of bodily injury- you would have to purchase the minimum, whether it be $15,000 or $50,000.
No- Fault States
One important thing to keep in mind when purchasing auto insurance is to see if you live in a “no-fault” insurance state. A no-fault state is a state that requires the auto insurance company to pay the medical bills for all the injuries involved in an accident, regardless of whose fault it was. Texas is not one of these states (Texas is NOT a no-fault insurance state).
Personal Injury Protection (PIP)
Another important aspect of Texas auto insurance policies is personal injury protection (PIP). A PIP covers any injury you might incur as pedestrian or a cyclist, medical expenses, and in some cases even lost wages as a result of an injury. While some states do require a PIP, Texas currently does not require one.
Uninsured/Underinsured motorist coverage
Uninsured/Underinsured motorist (UM and UIM ) coverage is many times an optional package that covers other expenses that may occur as a result of an accident. Bodily injury UM and UIM will pay for wages lost, disfigurement, medical bills, pain and suffering and disability. Property damage UM and UIM will pay for rental cars, repairs and items damaged in an accident, but there is a $250 deductible. UM and UIM coverage has to be offered by the insurance company, but only a few states actually require it, Texas does not require it, so if you choose not to purchase it the rejection of UM/UIM has to be put in writing for the insurance company.
Save Money on Texas Auto Insurance!
So, what does this mean for you? Texas state laws require that all motorists purchase minimum liability insurance in the form of 20/40/15. Rates for this liability package differ according to many factors, such as age and prior driving record, but a PIP is not required, thus making your minimum payment lower than if one was required. Texas also is not a no-fault state, so if injuries should occur, only the insurance company of the person at fault would pay. Other benefits such as UM/UIM coverage is optional.
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